Lee Bog & Company v Hanover

! 11 fire insurance policies were issued by different fire insurance companies (one of them is

respondent Hanover) in favour of Petitioner Lee Bog & Company.

The insurance covered "stock of rice and palay (loose and/or in sacks).
There was a common "simple loss payable clause" in favor of the Bureau of Commerce in all the
policies issued by defendants-appellants, except Policy No. 1016373, issued by the Hanover.
Hanover policy also contained a "simple loss payable clause" but in favor of the People's Surety
& Insurance Co., Inc.
The Republic of the Philippines intervened in behalf of the Bureau of Commerce as trustee to
receive payment in case of loss under the first ten above-mentioned policies.

! In this instant appeal, it is argued that the lower court erred in considering the claims on the

bonded palay belonging to depositors separately and independently from the claim on the
unbonded palay

WON the claims for bonded palsy is different from that of the unbonded palay?

YES

Bonded palay and unbonded palay, deposited in the warehouse of a ricemill, are treated
separately for fire insurance purposes.

The law requires that bonded palay belonging to third persons should be insured against fire, In
case of loss, the value thereof is payable to the Bureau of Commerce.

In the case at bar, the unbonded palay was owned by the owner of the ricemill.

The warehouse receipts (quedans) may prove the deposits of bonded palay. The unbonded
palay may be determined from the records of purchases of palay and sales of milled rice.

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